Zoom Communications (ZM) ended the recent trading session at $89.77, demonstrating a -1.25% change from the preceding day's closing price. This move lagged the S&P 500's daily gain of 0.89%. Meanwhile, the Dow experienced a rise of 0.74%, and the technology-dominated Nasdaq saw an increase of 1.29%.
The video-conferencing company's shares have seen an increase of 7.79% over the last month, surpassing the Computer and Technology sector's loss of 6.6% and the S&P 500's loss of 0.63%.
The investment community will be paying close attention to the earnings performance of Zoom Communications in its upcoming release. It is anticipated that the company will report an EPS of $1.5, marking a 1.96% fall compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $1.27 billion, indicating a 4.22% increase compared to the same quarter of the previous year.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $6.17 per share and revenue of $5.09 billion, indicating changes of +4.22% and +4.54%, respectively, compared to the previous year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Zoom Communications. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 2.98% higher within the past month. At present, Zoom Communications boasts a Zacks Rank of #3 (Hold).
Looking at valuation, Zoom Communications is presently trading at a Forward P/E ratio of 14.75. This denotes a discount relative to the industry average Forward P/E of 19.97.
Meanwhile, ZM's PEG ratio is currently 3.32. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The average PEG ratio for the Internet - Software industry stood at 1.1 at the close of the market yesterday.
The Internet - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 85, finds itself in the top 35% echelons of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
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Zoom Communications, Inc. (ZM): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).